The Trump Second Term: A One-Year Review of Deals, Markets, and Jobs

Normally, I write about U.S. presidential elections every four years and issue periodic updates on big events in between: COVID, Silicon Valley Bank’s collapse in 2023, and the UBS / Credit Suisse deal right after that.

But it has been a very “eventful” first year of a new U.S. administration, whether you judge it by laws passed, executive actions, cover-ups, geopolitics, trade, or the kidnapping of foreign leaders.

So, I thought it might be useful to do a quick review of the Trump administration so far.

As some readers pointed out in the 2024 election article, my track record of predicting specific events and policies has not been great.

But that’s an even better reason to write this type of review: What went as expected, what did not, and, based on that, what might happen next?

Ground Rules: I will cover only topics related to jobs, financial markets, and deals, so I’m not going to get into Venezuela, Iran, Israel/Palestine, Ukraine, Greenland, the Epstein files, vaccines, abortion, ICE, etc.

Yes, I know that you may care deeply about these topics, but I don’t know enough to feel comfortable writing about most of them, and I don’t want to turn this into a novella.

My Summary of Year One of the Trump Second Term

My quick, unfiltered thoughts are:

• While Trump went more aggressively on tariffs and immigration than I was expecting, I believe my overall prediction was accurate (“Considering everything above, Trump’s victory is probably a slight positive for deal activity, markets, and finance compensation, but less so than his 2016 win.”). This original article was quite skeptical of his policies and possible big-picture macro changes, and this skepticism was warranted.
• Trump’s policies of looser regulation, looser anti-trust enforcement, and constant tech/AI boosting have increased M&A and capital markets deal activity (see below) and probably helped headcount and compensation at banks. The tariff debacle caused a temporary blip, and stricter immigration policies have also hurt things, but the net effect of everything is slightly positive.
• The “real economy” is weak and, at best, “mixed.” Yes, GDP growth looks good, but wage growth is poor, and blue-collar employment has fallen since Trump took office, despite promises that tariffs would bring back manufacturing jobs (source). Also, while inflation is down, prices have not fallen, and everyone is still outraged about the cost of living.
• Healthcare costs are also a disaster, partially due to expiring subsidies, but you may not experience this directly unless you buy a plan independently outside of employer-provided coverage.
• The “One Big Beautiful Bill” mostly maintained the status quo from the 2017 tax law, with a few modest changes to the treatment of tips and overtime pay and cuts to Medicaid spending. But this was mostly a non-factor in terms of jobs, deals, and markets. However, in the long term, it will make the deficits even worse, leading to more money printing and inflation (whether in asset prices or real life).
• The most surprising development was Trump’s bromance with Jensen Huang and his constant AI pitching. I expected some of this due to Elon Musk’s involvement in the campaign, but not quite to this extent. Effectively, Trump is betting the entire U.S. economy on data center and GPU spending, which is… pretty risky, even if it’s allegedly responsible for the majority of GDP growth. I also expect there will be a backlash due to AI-attributed job losses, the bubble bursting, or both.
• The bottom line is that, based purely on economics, the Trump second term is going poorly so far. Yes, it’s benefiting the tech/finance bros, but that’s not enough to win elections or popular support. Unless normal people start earning and saving more, this administration will go down as a failure.

There are some signs that Trump recognizes these issues, which explains why he’s pivoted in a more populist direction with the proposals to cap credit card interest rates, block institutional ownership of homes, and buy mortgage bonds to lower the cost of homeownership.

But even if he’s serious about these ideas, they will take a long time to implement and make an economic impact.

The Trump Second Term: Deals and Financial Markets

With this topic, we must think about two main points:

1. Was something directly within the administration’s control, or was it more of a broad macro factor?
2. If it was within presidential control, did Trump’s actions affect things in a specific way? Or was it more of a default/status quo situation?

For example, the Fed cut interest rates 3 times in 2025, but Trump had no direct control over these decisions.

Sure, he’s currently trying to bully Jerome Powell into slashing rates even more via a ridiculous “criminal investigation,” but rate decisions are made by the 12-person Federal Open Market Committee (FOMC).

As another example, I would put the “One Big Beautiful Bill” in the “default/status quo” category.

Yes, Trump influenced its passage, but it mostly maintained the rules from the 2017 tax bill.

It did change Medicaid spending and the taxation of tips and overtime pay, but those are unlikely to directly affect deal activity.

It also hurt renewables by eliminating many clean-energy tax credits, but that’s just one sector among dozens.

In my opinion, the four most important areas in which Trump had an outsized influence and resulted in a specific market outcome are:

1) Lighter Anti-Trust Scrutiny – Initially, some people thought the FTC might block or challenge more deals, but that turned out not to be the case (good summary here). There is still more deal scrutiny than under Trump I or Obama, but less than under Biden. This explains much of why M&A deal volume rose to $4.5 trillion, with a record number of mega-deals worth more than $10 billion:

2) DOGE Failure and Continued Massive Deficits – As most predicted, Elon Musk and his team’s efforts to cut government spending did not go well. Yes, they reduced the federal employee headcount by ~9%, but overall spending still rose over 2024 levels. To seriously reduce the deficit, the government would need to cut entitlement spending (Social Security, Medicare, and Medicaid) and defense spending.

They could probably find and cut fraud with more time/effort, but the total amount is likely in the $100 – $300 billion range vs. ~$7 trillion in spending.

3) Tariff Storm – The “Liberation Day” tariffs in April 2025 caused immediate financial and economic panic. You can even see their exact implementation date on a monthly payroll growth graph:

Trump later backtracked and used these wildly random tariffs as a negotiating ploy with various countries, but job growth did not recover.

Tariffs introduced a ton of uncertainty into the financial markets and probably postponed or killed some deals in the process, especially for manufacturing-oriented companies.

But mega-deals seemed to recover after the initial shock, especially since most of them were in other sectors (tech, media, and natural resources).

4) AI Boosterism – This one is harder to quantify, but Trump made a series of decisions that boosted Big Tech and other AI-adjacent companies, from allowing Nvidia to sell its H200 chips in China to attempting to curb state-level AI regulations.

This led to over $425 billion in VC deals, with over 50% going to AI companies.

It also produced some controversial deals, from Meta acquiring Manus (geopolitical issues) to Nvidia acqui-hiring Groq (structured as a “licensing deal” rather than a true acquisition).

Overall, these events and policies produced higher M&A deal volume and solid financial market performance.

But I would also point out that international markets, gold, and silver all greatly outperformed the U.S. in 2025.

So, you could argue that outside of deal activity, most of Trump’s actions have benefited investors in other countries and asset classes.

Immigration and Work Visas

I mentioned in my 2024 election article that I doubted that Trump would do much about legal immigration, such as for H-1B visas and the OPT program for international students at universities in the U.S.

And… that turned out to be wrong.

The administration attached a $100K fee to H-1B visa applications to discourage companies from using this visa for “cheap labor,” but not for anyone applying from within the U.S. (source).

So, this change will affect tech workers from India who want to move to the U.S., but I’m not sure it will directly impact international students currently in the country.

More concerning are potential changes to the OPT program, which allows international students to stay in the U.S. and work for 12 months after graduating (with a 24-month extension for STEM majors).

But it’s not quite clear what the administration wants to do here.

Any attempt to end the program would generate significant pushback from universities, but they could restrict it or limit it to STEM majors (for example).

The bottom line is that the path into finance careers for international students is much more uncertain than it used to be.

Unfortunately, I don’t have answers or advice on what to do, since we don’t yet know exactly what is happening.

The Trump Second Term: Jobs and the Real Economy

Up until literally the past week, Trump has proposed almost nothing to improve jobs, income, or costs for “normal people” outside the tech and finance bubbles.

Sure, you could argue the tax bill helped by allowing for more deductions and tax-free income, but this is tiny compared with the cost-of-living increases and poor wage growth.

So, this section is more about what Trump has failed to do so far but could potentially do in the future.

Three ideas would be:

1. Attack Healthcare Costs – Yes, this is a complex problem because there are insurance companies, government programs, pharma companies, hospitals, nursing homes, doctors, etc., but a few changes could make a big difference. For example, standardize all prices based on Medicare rates and eliminate or restrict the useless middlemen in the system, such as pharmacy benefit managers (PBMs). Ask Mark Cuban for more about this one!
2. Break Up Big Companies – You won’t like this idea if you’re in finance or investment banking, but consolidation in many sectors has driven up prices. It’s not the only cause of inflation, but it is one that the government has more direct control over, at least in certain cases. For more on this topic, see all of Matt Stoller’s work – you may not agree with him, but you will at least see things a bit differently.
3. Build More Homes – Finally, homes are far out of reach for most people in their 20s or 30s today. I realize that real estate is mostly a regional/local issue, but Trump could probably do something at the federal level to incentivize developers to build and sell more homes. For example, increase tax incentives for homebuilders or offer federal funds to states and cities in exchange for local zoning reforms.

Oh, and instead of applying seemingly random tariffs, use them selectively to target industries in which U.S.-based companies can compete.

I’m not universally opposed to tariffs, but they should be more of a “precision weapon” than a machine gun.

Some of these ideas would hurt deal activity and investors… but that’s kind of the point.

There’s always a trade-off, and no administration can succeed in the long-term by catering to a few billionaires over the rest of the population.

But remember that bankers still earn fees for advising on spinoffs and divestitures, so they get paid no matter how the environment shifts.

What’s Next?

I can see how some people might support Trump for cultural reasons, foreign policy, or AI boosterism, but I struggle to understand how anyone in a normal job could be enthusiastic for economic reasons.

A lot of people disliked the constant drama in Trump 1.0, but the general public mostly approved of his handling of the economy (could not find a comprehensive source, but here’s one example of 2019 polling supporting this).

They didn’t like him personally, but many people felt they were earning more and moving up the ladder.

But I don’t see that in the current environment.

Only people in a few specific sectors are doing well, and the entire economy seems lopsided in favor of AI researchers earning $200 million and OnlyFans models.

I expect something will change the current environment, whether it’s the Democrats outperforming in the upcoming elections, the AI bubble bursting, or a crisis/emergency, but I have no idea about the timing.

And if this course correction takes too long, perhaps it will be time for a quick relocation to Greenland.